A Colorado couple was indicted for operating a Ponzi scheme that promised investors annual returns of 48% to 120%. Richard Dalton, 65, and Marie Dalton, 60, were each charged with one count of conspiracy to commit mail fraud, wire fraud and interstate transportation of stolen funds. The couple was arrested in Atlanta, and will be returned to the federal district court in Denver to face the charges. If convicted, the couple faces up to twenty years in federal prison, along with criminal monetary penalties.
The Daltons, who were earlier charged by the Securities and Exchange Commission in a civil proceeding, were charged along with their company, Universal Consulting Resources LLC ("UCR"). From March 2007 to June 2010, the couple is alleged to have solicited investors for two different offerings known as the "Trading Program" and "Diamond Program". Each program purported to pay annual returns of 60% to 120% that resulted from successful trading. The couple promised investors in the Trading Program that their funds would be held in escrow, where a European trader would use the value of the account as collateral to obtain funds that would be used to buy and sell bank notes. Investors were told to expect monthly returns of four to five percent, and that the Daltons had operated the Trading Program for nine years. In 2009, Dalton started the Diamond Fund, which purported to invest in diamonds and provided a guaranteed monthly return of 10%. Yet, in reality, authorities alleged that the Daltons and UCR were nothing more than an elaborate Ponzi scheme, and that new investor funds were used to pay returns and principal to existing investors. Additionally, over $1 million was used for various personal expenses. Of the approximately $10 million paid out as profit, at least $5 million came from funds provided to UCR to invest in the Diamond and Trading Programs.
In connection with the SEC investigation, Richard Dalton refused to answer a myriad of questions under oath, including whether UCR ever earned a profit between 2007 and 2010, whether UCR ever purchased any diamonds, and whether the Diamond Program was a Ponzi scheme.
A copy of the SEC Litigation Release is here.
A copy of the SEC Complaint is here.